Detroit Goes Down

Traveling along Interstate 75, it’s only 621 miles from Chattanooga to Detroit. The political distance is more difficult to calculate.

Detroit on Thursday declared bankruptcy, seeking protection under Chapter 9 of the federal code. It is the largest public entity in the United States ever to do so. In 1960, Detroit had the highest per capita income in the United States; today, it is the poorest large city in the United States, with a poverty rate more than 20 percent higher than that of Cleveland, the third-poorest city, and half again as much as that of Philadelphia, the tenth-poorest city.

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Detroit has suffered the usual problems associated with large, Democrat-dominated cities. Its spending has long been out of control, and former mayor Kwame Kilpatrick and one of his cronies are prison-bound on 31 counts of extortion, bribery, and racketeering.

But these things, as bad as they are, are not the sole reason that Detroit is a failed city. The city has for years proved unable or unwilling to provide the basic services people expect from municipal authorities: While political cronies got fat, the people of Detroit were left with some of the worst schools in the country, some of the most dangerous streets in the country, and a mass-transit system that is a non-functioning mess. Not that you’d want to start a business there, but if you did, its licensing and regulatory agencies run the gamut from incompetent to corrupt.

#ad#So the people of Detroit went on strike. They did not picket city hall or demand a sit-down with the mayor. They packed up and left, taking their businesses, their innovation, and their tax dollars with them. The powers that be in Detroit can rob people blind, but they cannot make them stay.

As a result of this, Detroit has lost nearly two-thirds of its population. The decline of the automotive industry alone is not responsible for that: Ford by itself still employs enough people that it could employ one member of every family in Detroit. GM and Ford together could employ the entire working-age (18–65) population of Detroit, along with every man, woman, and child in Flint, Mich., and every man, woman, and child in Pontiac, Mich., and would still need to fill a few vacancies. That’s to say nothing of Chrysler, the American operations of firms such as Toyota and BMW, or Mercedes-Benz’s SUV business — or the countless manufacturers of automotive parts, components, materials, etc. What do most of those firms have in common? They do not want to be in or near Detroit.

The hunt for low wages is not the explanation for that fact. Motor Trend named the Mercedes-Benz GL Class the best SUV in the world this year — prices for that truck cross the $100,000 mark — and it is made in Vance, Ala. Does anybody really think that Mercedes, a company used to paying its German workers very attractive wages, is in Alabama so that it can pay Third World wages to toothless hillbillies to build its flagship SUV? A quick look at the numbers confirms that this is not the case.

Here’s a wild guess: Mercedes is in Alabama because nobody wants to live in Detroit except Kwame Kilpatrick, whose most likely next option is a six-by-eight cell, and the gentlemen of the United Automobile Workers union and their associates. The UAW, having helped to destroy the automotive industry in and around Detroit, is currently in the middle of its third attempt to unionize Mercedes-Benz workers in Alabama and elsewhere in the South, having committed tens of millions of dollars — where will that come from? — to the project. Joining the UAW is like joining the European Union — no matter how many times you vote against it, there’s always another vote, until it goes the other way, and then there are no more votes.

The current focus of the UAW’s most intense attention is Chattanooga, Tenn., where Volkswagen operates a factory.

The question that people in Chattanooga should be asking themselves is: What part of Detroit’s business model do we really want to replicate? That Detroit now has and has had a backward, rapacious, corrupt city government is not an inconsequential issue, but the seldom-acknowledged reality is that a community with a thriving economy can endure a fair amount of political parasitism. California, troubled as it is, limps along, but it would collapse without the technology and entertainment industries. You can find the same kind (though not the same degree) of waste and self-dealing in Houston as you do in Detroit, but Houston muddles through. New York City may have improved a great deal under Rudolph Giuliani, but it is not Zurich — it’s still New York.

Detroit is the victim of a vicious circle: Failing municipal institutions mean that without the allure of a high-paying job, Detroit is an undesirable place to live, while the unions have helped to drive away a great many of those high-paying jobs. A city that already was corrupt and incompetent saw its tax base evaporate, meaning that it quickly became a city that is corrupt, incompetent, and broke. Of its $11 billion in unsecured debt, the great majority — $9 billion — is owed to pensions and health-benefit plans for the same public-sector incompetents who helped bring the city to its knees in the first place. Detroit’s ruling class is a parasite that has outgrown its host.

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